Bitcoin Miner Hut 8 Buys $100M BTC Boosting Total Total Stash to $1B

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What to know:

  • Hut 8 bought $100 million bitcoin in the open market and holds 10,096 or about $1 billion BTC in market value.
  • The miner is planning to use the bitcoin reserve through options strategies, pledges, sales or other strategies.
  • Hut 8 will “remain opportunistic” and may buy more bitcoin in the future.

As a seasoned crypto investor with a few gray hairs to show for it, I’ve seen my fair share of market ups and downs. The recent move by Hut 8 (HUT) to buy $100 million worth of bitcoin is a bold one, but not entirely surprising given the current bull run.

In a similar move as MicroStrategy and MARA Holdings, Hut 8 (HUT) has opted to purchase Bitcoin directly from the open market.

Based in Miami, Florida, the firm announced they acquired approximately 990 bitcoins at an average price of around $101,710 per coin. This newest acquisition will increase their total bitcoin holdings to approximately 10,096, which equates to a market value of roughly $1 billion. As a result, they now rank among the top ten corporations with the most bitcoins, according to a statement released on Thursday.

1) According to a statement, the miner intends to employ options, pledges, sales, or other tactics from its reserve to manage its bitcoin holdings. Hut 8’s CEO, Asher Genoot, stated that his company will take advantage of opportunities to purchase more bitcoin in the open market when it sees fit, as reported by CoinDesk.

Today, the market appreciates and considers our strategic Bitcoin reserves beneficial, reducing our overall cost of capital and boosting our financial stability. So long as this market trend continues, we will continue to seize opportunities for growing our Bitcoin reserves. (Genoot’s statement)

The action is in line with Hut 8’s recent announcement this month, where they initiated a $500 million at-the-market share offering program. Initially, they mentioned that some of the funds raised would be allocated towards purchasing bitcoin from the open market, along with other purposes.

In a notable move, MicroStrategy, with the largest amount of bitcoin held by corporations on their balance sheets, initiated the practice of purchasing bitcoin openly in the market. More recently, following MARA Holdings’ acquisition of bitcoin this year, which gained attention among miners, peer company Riot Platforms (RIOT) acquired 667 bitcoins at an average price of $101,135 on Dec. 16.

Investing heavily in Bitcoin through market purchases has proven beneficial for miners, providing innovative ways to secure funds during a period when the sector is facing profit reduction following the Bitcoin halving. Recently, MARA successfully raised a billion dollars via convertible debts – a type of financial instrument that allows investors to exchange their debt into equity. Remarkably, this bond comes with no interest, indicating that investors are keen on relinquishing interest income in favor of equities offering exposure to Bitcoin.

Hut 8 considers its Bitcoin reserve as a versatile financial tool, which provides flexibility and assists in the company’s growth. According to Genoot, we consider our strategic reserve as an adaptable financial asset that can be actively manipulated to generate returns that surpass just price increases.

In addition to substantial investments aimed at growing our primary business, reaching a mining capacity of 24 Exahash per second (EH/s) by mid-2025, strategic Bitcoin acquisitions from the open market can bolster our financial standing and enable us to make informed decisions on future growth investments,” he explained.

This year, the stocks of Hut 8 have experienced a 74% increase, compared to the 28% rise in the CoinShares Valkyrie Bitcoin Miners ETF (WGMI).

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2024-12-19 14:42